Government source dismisses power outage concerns amid IPP shutdown threats
A reliable source within the government has quashed speculations in the media about potential power outages resulting from the shutdown of power plants by Independent Power Producers (IPPs) by the end of June 2023.
The Chamber of IPPs had issued threats that its members would close their plants if the government failed to settle its outstanding debts. According to the Chamber, the government owes IPP members over $1.4 billion, accounting for a significant portion of the total energy sector debt of $2 billion.
To avert a shutdown, the Chamber demanded that the government pay thirty percent of the debt owed to its members. However, negotiations on debt payment had not commenced, leading to the imminent threat of plant closures.
In response to these concerns, the Managing Director of the Electricity Company of Ghana (ECG), Samuel Dubik Mahama, had previously stated that talks were underway to prevent a potential shutdown of power plants. A credible source close to the presidency has now confirmed that negotiations have indeed commenced and are yielding positive results.
The source emphasized that ECG has reached an agreement with at least Aksa power generation and Karpower, assuring that their plants will not be shut down. Furthermore, the ongoing discussions with other Independent Power Producers are progressing well, making it unlikely that any power plant shutdown will occur beyond the June 30 deadline.
Additionally, the source revealed that the negotiations conducted by ECG are reinforcing the government’s stance that capacity charges contribute significantly to the debt burden in Ghana’s energy sector. For instance, in the case of the negotiation with Karpower, only 40% of the $320 million owed by ECG is attributable to energy consumed, while the remainder constitutes capacity charges.
These recent developments provide reassurance that the government is actively engaged in negotiations with IPPs and is committed to finding a resolution to the debt issue. With ongoing progress and the avoidance of plant shutdowns, Ghana can mitigate potential power disruptions and maintain stability in its energy sector.
